Transactional Funding South Florida Legal?

The Great Debate over whether

transactional funding South Florida

is Legal is Still Raging!

I see blog posts that ask the question, “Is transactional funding South Florida legal?” I watch the answers and they come back from other investors, Realtors and ultimately a closing agent or attorney or two.

To put the debate to rest, transactional funding South Florida is legal in all states if done properly. If done improperly, it can raise to the level of fraud. There are two ways to do transactional funding South Florida and it is very important that the reader understands what is right and what is very wrong with each method.

Before I get into the obvious debate of legality, I want to address the “silent” debate about transactional funding that 99.9% of investors don’t know and few closing agents realize. The question here is “Is transactional funding a loan or not?” The answer may seem very obvious that transactional funding is a temporary loan, but it is not in some of the sharper legal minds in the country.

The monies for transactional funding South Florida are wired into the escrow account of a closing agent to be used for the A – B or initial leg of the double closing that is anticipated. Coincidentally, the end-buyer also should have wired in his total purchase price for the closing. In the agent’s escrow account there will be twice the amount of money needed for the A – B closing. Which money is used, the transactional funds or the end-buyer’s funds? The money is virtually indistinguishable except for the amounts wired into the account.

If the transactional funder requires loan documents to be signed by the investor, the transactional funding is definitely a loan and potentially subject to state document stamps. Some states have already ruled that even if the loan document (mortgage) is not filed in the public record, doc stamps must be purchased. This potentially means that the transactional funder and consequently the investor/borrower will have an extra cost in the transaction.

However, if the transactional funder only escrows a given amount of money and doesn’t make the “user” sign loan documents, the monies are not loaned to the investor. This tends to be the majority thinking among closing attorneys and closing agents across the country. In fact, some attorneys using transactional funders actually leave an extra balance in their escrow accounts to cover current and future closings. Your closing agent will know whether or not to charge the investor doc stamps on the transactional funding he is using.

As to the question of whether transactional funding South Florida is legal or not, this is not a legal opinion but rather the combined responses of many attorneys – transactional funding South Florida is legal if the end-buyer’s funds aren’t used for the A – B closing or if all the parties to the transaction sign a Disclaimer Agreement before the closing.

In summary, real estate investors anywhere in the country and specifically in South Florida, should use transactional funding South Florida whenever necessary to legally do double closings in any of the following cities – Miami, Miami Shores, Hialeah, South Miami, Homestead, Doral, North Miami, North Miami Beach, Liberty City, Ft. Lauderdale, Hollywood, Sunrise, Pembroke Pines, Margate, Deerfield Beach, Weston, Plantation, West Palm Beach, Palm Beach, Wellington, Lake Worth, Boca Raton, Boynton Beach, Wellington and Delray Beach to mention a few cities.

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About The Author

Dave Dinkel graduated from the University of Florida in 1968 with a BS in Chemical Engineering. He initially worked for a petrochemical research and development company in Illinois. Later he entered the financial arena as a stock and commodity broker with Merrill Lynch.While a stock broker he became a Certified Financial Planner and later started his own brokerage firms and stayed in the financial services industry for 22 years before retiring to pursue his love of real estate investing. After retirement, and because of his interest in business start-ups, he worked with a small company for a few years while driving their sales from under $12,000,000 to over $150,000,000 annually before going back to full-time real estate investing.Dave Dinkel has been a national platform speaker, contributor to local real estate clubs, mentor and consultant to numerous real estate investors and all the while running his own real estate business. Mr. Dinkel received the following degrees or designations: BSChE, FINOP, CFP, MSRP, RSP, RR, ROP, SROP, MGA, GA, Certified Estate Planner, Licensed Mortgage Broker, and Licensed Insurance Agent. He is often referred to as the “Teacher of Teachers” and his Mentoring continues to produce Students who go on to be national real estate "Gurus". .He has been a real estate investor since 1975 and recently received the first-ever Lifetime Achievement Award for Contribution to the Real Estate Investing Community. While being active in real estate investing for over 40 years, he and his wife Nancy have been married for over 52 years. He is most well known for the development of his Mentoring Program that has been called, "The Best Mentoring Program in the Country" which he continues today.In addition to his Mentoring Program, he started a full-service transactional funding Program so that new investors had the ability to do deals with no money of their own. He challenged the funding industry by making borrowing money very simple with his "One Point Funding Program" which has revolutionized the transactional funding industry and made millions of dollars available to investors who otherwise could not have afforded it. Currently his transactional funding is only available in Florida.Get more information about his real estate investing mentor program at http://www.DaveDinkel.com